Consider the PhiladelphiaLos Angeles flight discussed in Q16.5. Assume the available capacity is 200 seats and there
Question:
a. What is the probability of selling 200 reservations if you set an optimal protection level for the full fare?
b. Suppose a protection level of 85 is established. What is the average number of lost high-fare passengers?
c. Continue to assume a protection level of 85 is established. What is the expected number of unoccupied seats?
d. Again assume a protection level of 85 is established. What is the expected revenue from the flight?
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Related Book For
Matching Supply with Demand An Introduction to Operations Management
ISBN: 978-0073525204
3rd edition
Authors: Gerard Cachon, Christian Terwiesch
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